The present invention is directed to methods for subrogation and reimbursement recovery and to methods for optimizing premium reduction.
Subrogation is a method utilized by employers, health care insurers, health and welfare funds, government agencies and other entities (hereinafter collectively called “primary payers”) to recover funds which they have previously paid out on behalf of insured individuals for medical treatment costs. Millions of health care claims are paid annually by such primary payers without a system or procedure to determine whether such payments are subrogable or reimbursable from third parties who may be legally responsible and liable for the payment of such costs. Legal precedent governed by laws such as ERISA and the Affordable Health Care for Americans Act, as well as contractual language contained in insurance premiums, collective bargaining agreements and other documents mandate that, where appropriate, the initial paying fund, i.e., the primary payer, is required to pursue any subrogation rights in order to recover such health care costs and claims, thereby reducing cash outlays of the fund and, in turn, reducing insurance costs to insured persons.
In the past, primary payers have paid health care providers for medical treatment without knowing or determining the origin or identity of the potential causes requiring the underlying medical treatment. If there is no way to analyze, track or trace data pertaining to the epidemiological and medical causes of the medical treatment, it follows that there is also no way to assess responsibility for the corresponding costs. To date, access to this data was restricted and labor and industry had no means to monitor, organize and analyze it. Inaccurate and imprecise reporting and recording practices have made this data and information unreliable for any present or future use. Thus, in order to analyze, compare and understand medical causation and medical treatment trends as well as to determine the responsibility for payment of the corresponding medical treatment costs, it would be beneficial to have defined and objective systems and procedures implemented to organize and analyze health care claim information.
Traditionally, health and welfare plans pursue subrogation in auto accident, premises liability, products liability and medical malpractice claims. Oftentimes, health and welfare plans take a “wait and see” approach to see if a plan participant pursues a third-party claim. Presently, funds have no in-house system to monitor reimbursement of these claims based on activities of outside attorneys. Fund plans employing this methodology suffer from inconsistent results because the plan is at the mercy of the attorney who was chosen by the plaintiff/insured to litigate the case. Likewise, funds have no in-house system to identify through diagnosis information those claims most likely to be subrogable to a third party. As a result, the plan has little ability, if any, to monitor and pursue its maximum recovery potential.